Guaranteed Stock is a stock in a company for which another company or bank promises to pay dividends in case the issuing company defaults. It is a stock on which interest is guaranteed either by the government or any authority other than the issuing authority. This stock the dividends on which are guaranteed by a corporation other than the issuing corporation. It is a type of preferred stock that is issued by a corporation and whose dividends are guaranteed by one or more other corporations or banks. It has two meanings, one applied to dividends and one applied to inventory. Guaranteed stock issues, like guaranteed bonds, have most often used by railroads and public utilities. The guaranteed dividend can increase the stock’s price.
Guaranteed Share is a share of stock in a company for which another company or bank promises to pay dividends in case the issuing company defaults. It is a rarely used form of preferred stock, where a party other than the original company guarantees dividends will be paid. This is the stock for which dividends are guaranteed by a company other than the one issuing the stock. The second meaning for guaranteed stock correlates to a company’s physical inventory. In this use of the term, guaranteed stock refers to commonly purchased items that a company always keeps a supply of for customers to purchase. However, the financial and credit history of the guarantor corporation plays an important role in deciding the final market price of a guaranteed stock.
If you’re talking to an investor, guaranteed stock refers to stock that guarantees its holders dividends. Guaranteed investment income is sold by insurance companies as an investment vehicle. Guaranteed investment funds promise that all or part of the invested capital will be secure at a specific, designated time. If you’re talking to a business owner (one who sells physical goods), then guaranteed stock might be referring to their inventory of goods that is always on-hand. Without guaranteed stock, online businesses like Amazon would grind to a halt.
The guaranteed stock arrangement has frequently been used by railroads. These are most commonly issued by railroad corporations and public utility companies, and usually command a higher market price than non-guaranteed stocks due to the lower levels of risk involved. Though not technically fixed-income investments, high dividend stocks can be considered safe and offer an almost guaranteed rate of return. Some guaranteed investment income funds also allow people to reset the guaranteed amount during specific periods of time.
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